However, a setoff of existing obligations in a bankruptcy forum depends upon the terms of § 553, and not upon the terms of state laws or statutes. In re Warren, 93 B.R. 710, 711 (Bankr.C.D.Cal. 1988) quoting, Collier on Bankruptcy ¶ 553.06 (15th ed. 1988).
The potential impact on creditors is relevant in a setoff analysis. In re Warren, 93 B.R. 710, 712 (Bankr.C.D.Cal.1988). The Patricia Estate has not challenged the dischargeability of the $47,683.
Mutuality requires not only that the parties be the same, but also that they act in the same capacity. In re Warren, 93 B.R. 710, 712 (Bankr.C.D.Cal. 1988). Thus, for example, where the debt of an entity arises from a fiduciary duty, or is in the nature of a trust, there is no mutuality. Western Dealer Management, Inc. v. England (In re Bob Richards Chrysler-Plymouth Corp., Inc.), 473 F.2d 262 (9th Cir. 1973), cert. denied, 412 U.S. 919, 93 S.Ct. 2735, 37 L.Ed.2d 145 (1973).
Mutuality requires not only that the parties be the same, but also that they act in the same capacity. In re Warren, 93 B.R. 710, 712 (Bankr.C.D.Cal.1988). Thus, for example, where the debt of an entity arises from a fiduciary duty, or is in the nature of a trust, there is no mutuality.
See In Re Independence Village, 52 B.R. 715, 722 (Bankr.E.D.Mich.N.D. 1985) citing, Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194 (6th Cir. 1983); In Re Fulghum Constr. Corp., 706 F.2d 171 (6th Cir. 1983); cert. denied, 464 U.S. 935, 104 S.Ct. 342, 78 L.Ed.2d 310. (holding that the general rule in Chapter 11 cases is that there is no 60 day deadline to assume or reject executory contracts and thus § 365(d)(4) should be narrowly construed). See S.Rep. No. 989, 95th Cong., 49, reprinted in 1978 U.S. Code Cong. Admin. News 5787, 5835 ("Bankruptcy is designed to provide an orderly liquidation procedure under which all creditors are treated equally"); see In Re Warren 93 B.R. 710, 712 (Bankr.C.D.Cal. 1988) (holding that exceptions to the general rule in bankruptcy that creditors are to be treated equally should be narrowly construed). Narrowly construing the exception of § 365(d)(4), if people reside on the real property, it is not nonresidential even if it is also used for nonresidential purposes.
93 B.R. 710 (Bkrtcy.C.D.Cal. 1988)In re Kenneth Dobbie WARREN, Debtor.CO-ADMINISTRATORS OF the ESTATE OF O.P. WARREN and O.P. Warren, Inc., Movants,v.Kenneth Dobbie WARREN and Richard Marshack, Trustee, Respondents.Bankruptcy No. SAX 87-03771 JR.United States Bankruptcy Court, C.D. California.May 20, 1988 Richard L. Haeussler, Newport Beach, Cal., for Richard Marshack, trustee.